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The USA Of The 21st Century Is Like Britain In The 19th Century



John Richardson And FATCA

In 2018 Professor Lucy Salyer of the University of New Hampshire published “Under the Starry Flag” – a book largely about the 1868 Expatriation Act. The book describes a period in American history where Britain treated its “subjects” as having perpetual loyalty to the British Crown. To put it simply: One could NOT emigrate to America and expatriate. No matter what one did, those who were born British Subjects were destined to die British Subjects.

The above tweet links to an interview of Professor Lucy Salyer conducted on February 9, 2019. The interview is about Professor Salyer’s new book “Under the Starry Flag”. It is a fascinating (brilliantly researched) work. The publisher describes the book as:

The riveting story of forty Irish Americans who set off to fight for Irish independence, only to be arrested by Queen Victoria’s authorities and accused of treason: a tale of idealism and justice with profound implications for future conceptions of citizenship and immigration.

In 1867 forty Irish American freedom fighters, outfitted with guns and ammunition, sailed to Ireland to join the effort to end British rule. Yet they never got a chance to fight. British authorities arrested them for treason as soon as they landed, sparking an international conflict that dragged the United States and Britain to the brink of war. Under the Starry Flag recounts this gripping legal saga, a prelude to today’s immigration battles.

The Fenians, as the freedom fighters were called, claimed American citizenship. British authorities disagreed, insisting that naturalized Irish Americans remained British subjects. Following in the wake of the Civil War, the Fenian crisis dramatized anew the idea of citizenship as an inalienable right, as natural as freedom of speech and religion. The captivating trial of these men illustrated the stakes of extending those rights to arrivals from far-flung lands. The case of the Fenians, Lucy E. Salyer shows, led to landmark treaties and laws acknowledging the right of exit. The U.S. Congress passed the Expatriation Act of 1868, which guarantees the right to renounce one’s citizenship, in the same month it granted citizenship to former American slaves.

The small ruckus created by these impassioned Irish Americans provoked a human rights revolution that is not, even now, fully realized. Placing Reconstruction-era debates over citizenship within a global context, Under the Starry Flag raises important questions about citizenship and immigration.

In the 19th Century Britain regarded its subjects as subjects for life. Many Americans abroad will appreciate how the book applies to their lives Americans in the 21st century. To put it simply Americans abroad are treated as primarily Americans citizens – even though they are often citizens and residents of other countries. (Shades of the British – History does have a way of repeating itself.) Renunciation is desirable, difficult, expensive (and for those who are in the U.S. tax system – inevitable). For many Americans abroad:

All Roads Lead To Renunciation.”

Furthermore, dual citizens (for example the accidental Americans in France) are beginning to request that their countries of citizenship/residence intervene and assist their citizens in breaking ties with the United States. History does repeat itself.

Professor Lucy Salyer’s “Under the Starry Flag” and the 1868 Expatriation Act

Professor Salyer is a historian with a specialty in the history of American immigration and citizenship. “Under the Starry Flag” chronicles the historical context of the 1868 Expatriation Act. (For a fascinating discussion of Congressional speeches leading up to the Expatriation Act – see this excellent post at the Isaac Brock Society. An excellent review of the 1868 Expatriation Act by Daniel Rice is here. The Expatriation Act is discussed at Renunciation Guide here.

About the Expatriation Act

The Expatriation Act of 1868 is found in the U.S. Code and specifically states:

Right of Expatriation

R.S. §1999 provided that: “Whereas the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness; and whereas in the recognition of this principle this Government has freely received emigrants from all nations, and invested them with the rights of citizenship; and whereas it is claimed that such American citizens, with their descendants, are subjects of foreign states, owing allegiance to the governments thereof; and whereas it is necessary to the maintenance of public peace that this claim of foreign allegiance should be promptly and finally disavowed: Therefore any declaration, instruction, opinion, order, or decision of any officer of the United States which denies, restricts, impairs, or questions the right of expatriation, is declared inconsistent with the fundamental principles of the Republic.

The Expatriation Act was/is a U.S. law which enacted to ensure that (at least from an American perspective) that those who emigrated from other countries and naturalized as American citizen, would be treated by America as American citizens and NOT as citizens of their country of origin. (You may recall that the War of 1812 was fought in part for the reason that the British Navy was impressed by American sailors because they were viewed as British subjects. In short the British were claiming that American citizens were British subjects.) In other words, the United States believes (or believed) that individuals wishing to naturalize as U.S. citizens have the right to sever their citizenship with other countries. Does that mean that the United States believes that U.S. citizens should have the right to divest themselves of U.S. citizenship? This question has not been tested – but is now relevant in a FATCA world.

Significantly at the end of Chapter 10 (on page 174), Professor Salyer writes:

Two issues loomed, undercutting the act’s potential reach. One was whether the 1868 law allowed Americans to expatriate. Despite the general declaration of the right of expatriation, the act focused only on the rights of foreigners to abandon their homelands to become Americans. Perhaps it seemed unfathomable that Americans might want to leave their blessed land, but some had moved and taken up lives elsewhere, swearing allegiance to other sovereigns leaving their status uncertain and the United States open to charges of hypocrisy.

She also made this point in the Q and A in a presentation that she made in New York on January 31, 2019. See:

https://twitter.com/ExpatriationLaw/status/1100868678164320258

I highly recommend this video for those who do not have the time to read the book.

FATCA, Citizenship-based taxation and U.S. citizenship

The enactment of FATCA in 2010 demonstrated that history has repeated itself. The United States is now claiming that residents and citizens of other countries, who emigrated from the United States, are still U.S. “tax residents”. Many of these unfortunate souls believe that U.S. citizenship is being forcibly imposed on them. Some are desperate to relinquish U.S. citizenship, but are held captive to America by the highest renunciation fee in the world ($2350) and an the highest Exit Taxes the world has ever known. It appears that history has come full circle. The tyrannical British practices of the 19th Century are now the tyrannical American practices of the 21st Century.

Because this is not well understood by Homeland Americans, it is helpful to describe:

The tyranny of U.S. citizenship-based taxation – 2013

American tyranny has been described by former ACA member Jackie Bugnion in her 2013 submission to the House Ways and Means Committee as follows:

In 1776, the United States declared independence because the mother country on the other side of the ocean was imposing taxes on the colonies for the benefit of England. Resentment started when Britain tried to enforce the Navigation Act after 1763. Resentment increased with the Stamp Act in 1765, a way for Britain to tax the colonies. The British Tea Act of 1773 led to the Tea Party and we all know the outcome – the American Revolution and independence crying out “no taxation without representation”.

Today, the estimated 7 million Americans resident abroad, of whom the majority are long-term overseas residents in high tax OECD countries, face a comparable situation. Their representation in Congress is non-existent in reality. Americans abroad amount to only 1 to 2% of the votes in any particular state; Congressmen and Senators have ignored their tax issues. The unjustified myth that Americans abroad are wealthy and disloyal restricts a rational approach to the problems because of political image issues.

Citizenship-based taxation (CBT) has existed ever since the federal income tax was adopted. Despite CBT being an anomaly involving double taxation, taxation of phantom gains and explicit tax code discrimination, it was grudgingly tolerated by Americans abroad because it was essentially voluntary, most often involved little tax or no U.S. tax liability and basically was not enforced. In particular, the FBAR filing requirement was so obscure that even the big four accounting firms were not aware of the filing obligation dating from 1970 and failed to inform Americans abroad of the need to file the FBAR.

Since 2001, a series of legislative events have radically changed the situation:

  • In 2001, the Patriot Act made anything foreign suspect, including Americans residing overseas.
  • In 2004, Congress, under the Jobs Act, drastically increased the FBAR civil and criminal penalties to confiscatory levels, creating a disguised form of taxation on assets held overseas.
  • In 2006 administration of the FBAR reports was transferred to the IRS for enforcement.
  • In 2006 the Tax Increase Prevention and Reconciliation Act (TIPRA) extended the Bush tax cuts and included a compensatory revenue raising provision that reduced the benefit of the foreign earned income exclusion, limited the foreign housing allowance and pushed Americans overseas into higher tax brackets, thereby increasing U.S. tax liabilities for many Americans abroad.
  • In 2008 the law relating to renunciation of U.S. citizenship was revised under Section 877A and introduced an Exit Tax on wealthy individuals (defined as “covered”). The law also provided that Americans who inherit from estates of former “covered” U.S. citizens are subject to U.S.
    inheritance tax with no exclusion. This outrageous discriminatory provision aims to discourage renunciation of citizenship, but in fact penalizes children of former U.S. citizens for an act they did not commit. In practice, it encourages the children to also renounce their U.S. citizenship.
  • In 2009 the IRS launched its initiative against tax evasion linked to foreign assets through the Overseas Voluntary Disclosure Programs and a threatening public relations campaign. While it justifiably targeted U.S. resident tax evaders, it simultaneously trapped Americans abroad who necessarily have foreign assets. The IRS’s one size fits all policy and bait and switch tactics led to abuses of Americans abroad which inspired sharp criticism from the National Taxpayer Advocate.
  • In 2010 FATCA was slipped into the HIRE bill with no debate in Congress and no cost/benefit
    analysis. FATCA aims to provide the door that closes the fiscal trap by requiring foreign financial institutions to report to the IRS on assets held overseas by U.S. persons. It effectively cuts off many Americans from foreign financial institutions which find it too onerous to maintain American clients. FATCA creates a barrier to free movement of capital and people.
  • In 2012 S.3457 proposed to grant the IRS the authority to have a U.S. passport cancelled or not issued if the IRS determined that the individual owed $50,000 or more U.S. tax.
  • In 2012 the Ex-patriot Act, S.3205, proposed to deny any “covered” expatriate re-entry into the United States, with retroactive effect for ten years prior to enactment of the law. The Reed
    Amendment of the 1996 Illegal Immigration Reform and Immigrant Responsibility Act already
    allows the United States to deny entry of former citizens into the United States.
  • In 2013, S.268 was introduced; it compounds difficulties created by FATCA.
  • In 2013 the Senate Finance Committee included in its tax reform recommendations a provision which would grant the IRS authority to cancel a U.S. passport for tax collection purposes.

This stream of legislation and proposals categorizes Americans abroad as suspected criminals seeking to escape U.S. taxes. Congress has outdone George III and has turned the United States into a fiscal prison, including legislation which is deemed anti-constitutional under the Fifth Amendment1 and is contrary to Articles of the Universal Declaration of Human Rights.2
The foundation of the U.S. fiscal prison is citizenship-based taxation. Americans working and living abroad carry a ball and chain of dual taxation throughout their entire lives up to and including death.

Americans abroad already pay taxes in the country where they reside and receive governmental services.

The additional U.S. tax obligation creates inevitable incompatibilities and discrimination and even requires Americans abroad to break foreign exchange control laws to pay U.S. taxes.

A revolution among long-term overseas residents is now underway. Five years ago, Americans abroad never talked about renunciation of citizenship. Today, it is a common topic in the press and among the community abroad. For more and more individuals, renunciation is the only solution to an intolerable situation created by the U.S. imposing its laws beyond its borders. The United States is literally destroying the community of Americans abroad, which plays an essential role in representing U.S. interests and goodwill overseas. The United States is shooting itself in the foot.

While the absolute number of renunciations, currently around 2,000 a year, is insignificant compared to the average annual U.S. citizenship naturalizations of 680,000, renunciations have multiplied seven times over the last four years. So far we have seen only the tip of the iceberg if CBT remains in force.

Today’s situation leads to serious hidden prejudice for the United States. U.S. exports are far below where they should to be because citizenship-based discourages U.S. companies from deploying U.S. citizens overseas to sell U.S. products; the law makes them too expensive. U.S. tax law and FATCA create insurmountable barriers for small and medium-sized companies to establish beachheads abroad to develop exports. The loss represents millions of U.S. jobs, hundreds of billions of dollars of exports, billions of dollars of U.S. tax revenue, and an unsustainable trade and budget deficit. Americans married to a foreign spouse, who represent about a third of the Americans resident abroad, now hesitate to register their children born abroad with the U.S. Embassy. The hot thing among young adults in their twenties is to renounce U.S. citizenship; they are aware of the impossible web of U.S. regulations that restrict job opportunities and personal freedom. Pushing away the young generation of Americans abroad is an immense loss to the United States. In prior generations, many highly educated multi-lingual American children returned to the United States, founded companies and created jobs in the U.S.

Adopting RBT will stop this revolution immediately. RBT law needs to be drafted in the spirit to allow free movement of individuals to leave and return to the United States, to reinforce the competitiveness of Americans and the United States overseas, to provide a simple, non-penalizing transition to RBT for the community of Americans already overseas, to ensure that Americans abroad are not subject to FATCA and FBAR, to adapt existing bilateral tax treaties and enter into new tax treaties so that withholding tax rates on U.S. source income are reasonable and to ensure that Americans abroad who have the majority of their assets in the United States (retirement funds, pension funds, real estate) are not disadvantaged under RBT with regard to either income or estate taxes.

I thank you for the opportunity to comment and hold high hopes that your bi-partisan efforts will lead to the constructive tax reform so necessary for Americans residing abroad.

Sincerely yours,
Jacqueline Bugnion

The tyranny of U.S. citizenship-based taxation – 2019

The treatment of Americans abroad is infinitely worse than when Ms. Bugnion was writing in 2013. The Section 965 Transition Tax has punished many Americans abroad for their past. Sec. 951A GILTI is ensuring that they cannot have small businesses. The Sec. 877A Exit Tax means that they United States will confiscate the non-U.S. assets of people who attempt to renounce. The United States is actually imposing a higher and more punitive level of taxation on U.S. citizens who live outside the United States than on U.S. citizens living inside the United States. To add insult to injury, revocations of U.S. passports for delinquent tax debts are now in force.

Concluding thoughts …

Professor Salyer has done a masterful job of researching the historical context of the 1868 Expatriation Act. The book also includes a general discussion of the evolution of U.S. citizenship law and how it relates to the development of U.S. immigration law.

Although I think the book will be of particular interest to Americans living outside the United States, it wonderful exposition of an important period of American history.

Written by John Richardson.

 

 

 

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The Reality of U.S. Citizenship Abroad

My name is John Richardson. I am a dual citizen. I am a lawyer – member of the Bar of Ontario. This means that, any counselling session you have with me will be governed by the rules of “lawyer client” privilege. This means that:

“What’s said in my office, stays in my office.”

I am also a member of the American Citizens Abroad Professional Tax Advisory Council (PTAC). This is an advisory panel focused on assisting American Citizens Abroad in an FBAR and FATCA world.

The U.S. imposes complex rules and life restrictions on its citizens wherever they live. These restrictions are becoming more and more difficult for those U.S. citizens who choose to live outside the United States.

FATCA is the mechanism to enforce those “complex rules and life restrictions” on Americans abroad. As a result, many U.S. citizens abroad are renouncing their U.S. citizenship. Although this is very sad. It is also the reality.

123 thoughts on “The USA Of The 21st Century Is Like Britain In The 19th Century

  1. Avatar Chrys T says:

    I’m one of those who, with a heavy heart, renounced US citizenship last year. I’m on a low income, pay taxes already where I live (and have citizenship), and couldn’t afford the help I’d need to correctly fill out US tax returns just to show that I owed nothing.

    • Avatar Hannah says:

      I am under the impression that as an Accidental we have to complete 5 years worth of tax returns in order to renounce…is this wrong?

      • Avatar Nononymous says:

        This is wrong. The renunciation process is completely independent of tax compliance. You will not be asked questions about your tax status when you renounce. (Oddly enough, people in the tax compliance business are keen to perpetuate this misunderstanding.)

        Five years’ tax and FBAR compliance plus form 8854 is required to exit the US tax system after renouncing. If you are an accidental and were never in the system, there’s no real point going to the trouble of entering just to leave again. Some do, some don’t, depends on the situation and the potential costs. The only consequence of not becoming tax compliant is that you will be designated a “covered expatriate”, which is essentially meaningless (in theory the US could impose a punitive tax on money you give or bequeath to a US taxpayer, is all).

    • In 1967 the U.S. Supreme Court ruled that Congress could not forcibly divest people of their citizenship. (Afroyim v. Rusk). It seems to me that (in a simple situation, presumably like yours) the tax requirements may be forcing the renunciation and is arguably unconstitutional. This does show how expensive and onerous the requirements imposed on Americans abroad are.

  2. Avatar John Francis says:

    The US needs to cease taxing the tax residents of other countries. Im a dual US/CA citizen living in Canada and it makes living a normal life impossible from being punished for taking a work pension (PFIC taxed), not being able to invest for retirement in my TFSA / RESP (Canada’s ROTH IRA) which is taxed as a foreign trust. Not being able to invest in Canadian mutual funds, Index funds, certain stocks, etc (PFIC taxed). Im unable to operate a business as its double-taxed (GILTI / Subpart F as a Controlled Foreign Corporation). The yearly accounting alone to pay an international tax account to file all the yearly forms and disclosures is $1000’s alone. There are so many nasty tax caveats because two tax codes are never the same and the IRS punishes anything “foreign”

    The US needs to cease taxing the tax residents of other countries, cease chastising its own citizens who live abroad. All this does it make US citizens noncompetitive, their lifes miserable and their taxes unmanageable. The US is the only country on Earth to punish its citizens in such a away. It makes no sense and needs to stop.

    • Avatar Jeff C says:

      John Francis’ reply is very representative of what myself and many Americans abroad have experienced. In addition I will add that I needed to leave a position after discovering that I needed to report the company accounts to FinCen despite having zero financial interest in the accounts, and the company having zero US ownership

    • Avatar Nononymous says:

      Leaving aside for a moment the general stupidity of US tax policy, a few comments about your own personal situation.

      As a dual citizen in Canada you can live a perfectly normal life. Financial institutions will not prevent you from opening accounts or investing in TFSAs or RESPs, mutual funds or anything else. The problems with those types of investment only arise when you attempt compliance and file US tax returns. The solution then is quite simple: do not file US tax returns. If you are a Canadian citizen with no US assets, the IRS has no ability to collect from you. If you decline to acknowledge US citizenship when asked by a Canadian bank, you will not be subject to FATCA reporting, and the IRS will know nothing of your existence.

      In other words, US tax law does not directly cause difficulties for Canadians because, quite simply, US tax law cannot be enforced in Canada. Canadians voluntarily attempting to comply with US tax law, however, will have problems. (Canadians with US assets or income sources, or US citizens living in Canada as permanent residents, should tread more carefully.)

    • Thanks for this John. The basic problem is that the U.S. Internal Revenue Code is hostile to three things:

      1. Anything foreign (U.S. citizens abroad are clearly up to no good if they commit “personal finance abroad”)

      2. Deferral unless it is specifically approved in the Internal Revenue Code (But all Canadian financial planning is based on deferral)

      3. Anything that allows for leakage of assets from the U.S. tax base (this explains why the non-U.S. spouse is so problematic under the Internal Revenue Code).

  3. Avatar Charles Campbell says:

    Pershing UK, a wholly owned subsidiary of Bank of New York Mellon closed my investment account because of my American citizenship.

  4. Avatar Jeff C says:

    John Francis’ comment is very representative of what I and several Americans abroad have experienced. In addition I will add that I have had to leave a position after finding out that I needed to report company accounts to FinCen despite having zero financial interest in the accounts, and the company having zero US ownership.

  5. Avatar troutbum says:

    The US prides itself on its ‘exceptionalism’…well CBT is exceptionally bad & plain stupid. But it is not at all surprising that the US (the only major country in the world) uses the bullying tactic of CBT to put all of its expat citizens under enamours financial burden & stick a major spanner in the works of everyone’s lives. They seem to grasp the concept domestically as if you move from New York state to California, no state government expects you to continue to pay taxes in New York. Your are now a resident of the state of California & as a resident you will use & pay for (via taxes) California’s services such as roads, sanitation, etc…why is that concept so hard to understand with people who are residents of other countries? And I really hate the constant press blather about how we are all wealthy tax cheats – bollocks.

    • Avatar Sun Tzu says:

      Yes it is bad and stupid to double tax its citizens no matter where we live. The problem we have is many socipaths run the country from in the government and in the private sector. They cannot confront the issues that hurt Americans, least of all expats. They prefer to leave the disaster in place because one (or many) of their donors benefits from someone elses suffering. Exhibit A is the expat community. Congress has guaranteed many vultures a piece of the expat pie. Lawyers, audit firms, courts, debt collectors, etc., are all on the money grabbing bandwagon.

      Equally rotten is there no such thing as meaningful investiagative journalism any more. Sticking with government junk data drives their business model rather than investigating reall concerns. They’ve aligned themselves with powerful interests so stateside Americans are clueless about the people enforcing FATCA CBT.

  6. Avatar John Black says:

    I am Franco-American and have to file to both country. People think that in France it is complicated. I am doing my tax online in about 1 day and all is perfectly done and technology advanced there. The Irs gives no tool to file and they believe it is absolutely normal to pay usd 1400 a specialized tax cpa to do ypur taxes as ut is so complicated.
    My French tax is about 10 pages while my US tax forms are about 100 pages.
    I have been battling tonfind non pfic financial investments in France while my fellow French friends have the easy life to invest.
    It is all wrong. This must change.

    • Avatar Keirnan says:

      @john black – and it just got worse. Previously US Person in the EU could invest in ETFs and other funds based in the US (not PFICs) even though that gave theme USD risk that was lot normally appropriate to their life in europe. But now the EU rules on Key Information Documents mean that US brokers will no longer allow EU residents to buy funds in the US. So now US Persons living in the EU can’t invest in any funds.

  7. Avatar Trish says:

    As soon as our dual child (Canadian/American) is old enough to renounce, my husband will follow suit. For now I will continue to file his US taxes to prove he owes nothing. We will continue to file our FBAR to show our accounts over $10k and we will continue to live in our current home, as we would never sell and have to pay capital gains to a country we do not live in. Americans should need to wear a full disclosure CBT sign on them when visiting other countries so you think twice before you fall in love with them! A little humor to a not funny situation…

  8. Avatar T All says:

    I fully live and work in the UK, and having married a UK citizen am a dual American:BRITISH citizen. I intend to stay here until I die. And yet I feel persecuted because of our situation. I cannot save nor invest like a normal UK citizen does. I must constantly looking over my shoulder to what might possibly wrong with IRS reporting requirements because of my double status. This is a very expensive process and one that I cannot afford. I feel my own American government is punishing me because I moved away from the USA for love. We seem to be the only country in the world besides Eritrea that does this to its own citizens. Is there anything you can do in your position to help this cause?

  9. Avatar Tamara Bernard Allen says:

    I fully live and work in the UK, and having married a UK citizen am a dual American:BRITISH citizen. I intend to stay here until I die. And yet I feel persecuted because of our situation. I cannot save nor invest like a normal UK citizen does. I must constantly looking over my shoulder to what might possibly wrong with IRS reporting requirements because of my double status. This is a very expensive process and one that I cannot afford. I feel my own American government is punishing me because I moved away from the USA for love. We seem to be the only country in the world besides Eritrea that does this to its own citizens. Is there anything you can do in your position to help this cause?

  10. Avatar Simone Z says:

    Sadly, I renounced my US citizenship two months ago. My non-US parents happened to be in the USA when I was born and so I am/was the only American in my family. They returned home when I was a few months old which means I was ignorant of the implications of US citizenship until recently. The requirement to declare details and amounts of bank accounts of which I am a signatory but not an owner is in direct conflict with employment confidentiality agreements. So I had to choose between obeying the law of the US and the law of the country in which I live. Unfortunately, being a US citizen is career-limiting for many ‘expats’ (an odd way to describe an Accidental American!), especially now with FATCA. I will probably always hold sentimental feelings towards the country of my birth and have enjoyed our holidays there as a tourist, but the current situation of arrogant overreach is punitive and untenable.

  11. Avatar Sun Tzu says:

    Nice essay. 1868 has to be taken into context this was a period after the Civil War and the US entered a period known as the Reconstruction Period. This was probably the most progresive time in US history. During that same year the 14th Amendment was enacted to protect the newly freed slaves. Unfortunately, US was built on the backs of the weak and that progressive time has long faded from memory.

    The elites would not have any that and have been in charge ever since. Elites now demand they stop paying taxes & Congress has obliged. To keep the public appearance of going after the rich, Congress has focused tax collection overseas, describing expats as criminals and are rich and are hiding their wealth. Congress has a lot of enablers to spread this misinformation. We saw it recently with David Cay Johnston. He has knowingly relied on fake data from the Treasury for years without bothering to check what the USG was really up to. He kept up the myth of Americans abroad as tax dodgers but he has recently relented a bit with TCJA and realized it was a scam. Keep in mind this was a direct result of expats jumping on his twitter handle & telling him to start doing some real journalism for a change.

    In reality, USG does not need expat money if one fully understands what the meaning of having a sovereign currency is all about. It has the printing press and with a few keystrokes it can solve any of its problems. It is the only country that can do this. Need healthcare for all? Congress could fix this today. Need free public college tuition? It can fix this too. Bernanke was asked by Congress how he paid the trillions to banks during the 2008 collapse. He told them Treasury did it on a computer.

    Strangling expats is more of a political statement than anything else because it fits the imperial mindset.

    • You make some very good points. The way that this is played out on the legislative front is that all of these nasty laws affecting Americans abroad come in as “revenue offset provisions”. They are not the main law but a mechanism to (pretend) to pay for the main law. It’s hard to believe, but FATCA (think of all the problems it has caused) was actually one of the Revenue Offsets to pay for the HIRE Act. Think of it! FATCA wasn’t even the main law. This fact provides an explanation for why so many people in the USA (including Congressmen) have never even heard of it. Most (if not all) of the list of laws referred to by Jackie Bugnion were actually “revenue offsets”.

  12. Avatar Daniel Gross says:

    I have lived in Canada for 50 of my 65 years. Own a business (souvenir stores) and all of a sudden the US comes along with the repatriation tax and boom retirement savings taxed and gilti tries to take whatever’s left over. I now have no choice but to renounce.

    • That’s exactly right. If you are over the age of 50 the effect of the repatriation/transition tax is to literally confiscate your pension. The only rational response is renunciation. The transition tax – when applied to Americans abroad – shows that there is no limit to how low the U.S. will go.

      Get out! Renounce now!

  13. Avatar Marty says:

    Well-written, John!! Keep up the good fight. It’s high time for action on IRS overreach & taxation without representation.

    • Thanks Marty – because the political process is monopolized by the two parties – the average American has no representation and therefore suffers from taxation with representation.

      The real problem here is the United States imposing worldwide taxation on people who are tax residents of other countries and don’t live in the United States. It’s really a method of Colononization through taxation. Do you think that’s true?

  14. Avatar Jet LT says:

    I’m a Dutch Accidental American and refuse to comply to US CBT and refuse to pay the current ridiculous renouncement fee. Outrageous US tax law, my parents never knew of it, were never informed of it and neither was I (left US as a child). Had I known I would have renounced decades ago when the fee was small. I can’t afford to pay tax in 2 countries, it will ruin me and my family financially. It’s also a matter of principle. I pay plenty of tax in The Netherlands. What I don’t understand is how it is even possible for a country to impose their taxlaw on their citizens if they never, but really never, inform you of this. How is this justified? How? It’s becoming virtually impossible to have a bankaccount as a socalled US person thanks to FATCA and the IGA’s. #repealCBT #repealFATCA #RBT On behalf of NL AA’s we are talking to our Dutch Ministry of Finance and polititicians in Dutch government. They are symphathetic to our problems and are willing to work on finding a solution for Dutch AA’s. Also bc of the moratorium on banks to comply with FATCA which ends Jan 1, 2920. The clock is ticking! US persons, expatriates and AA’s, need all the help they can get in their fight against the unjust US taxlaw of CBT.

  15. Avatar Surie Ackerman says:

    The FATCA regime is trapping many U.S. between a rock and hard place; they cannot even open bank accounts in their countries of residence because banks don’t want to bother dealing with the American paperwork, while on the other hand they cannot open bank accounts in the U.S. because they cannot prove residency there, something that most banks and brokerages now require.
    We are not even going into the draconian PFIC regime, which makes it almost impossible for U.S. citizens abroad make any kind of profitable investments.
    These new transition tax/GILTI rule are a gross violation of other countries’ sovereignty and totally dissolve what is supposed to be a separation between corporate and personal finances.
    These taxes were imposed without any input from the people they affect. It’s the stuff revolutions are made of.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

    • “These new transition tax/GILTI rule are a gross violation of other countries’ sovereignty and totally dissolve what is supposed to be a separation between corporate and personal finances.
      These taxes were imposed without any input from the people they affect. It’s the stuff revolutions are made of.”

      Well said: The transition tax, GILTI and the Sec. 877A Expatriation Tax are really fictitious tax events which are designed to impose U.S. taxation on non-U.S. assets before the source country has a chance to impose taxation under their tax rules.

      It’s really a new form of warfare for the 21st Century which is: Using Americans abroad as the vehicle to extract capital from other countries.

  16. Avatar RobGe says:

    I am what is called a Dutch Accidental American, born in the US in 1957 because my Dutch parents where in the US for work. When I was 2 years old my parents went back to the Netherlands.
    So I am raised in the Netherlands, have studied there and have been working for more then 35 years in the Netherlands.
    I have not studied in the US and I have never worked in the US.
    I do not have any family, friends, or assets in the US.

    Untill about 1,5 year ago I was even proud with this small relation to the US.
    But then, suddenly, my Dutch bank send me papers about the FATCA agreements between the US en the Netherlands. About TAX obligations in the US I was never aware of.

    Ofcourse I have been paying taxes in the Netherlands my whole life and I could not understand why I should have to pay now also taxes in the US. For what reason, what did the US do for me to think this is right? Because of different tax rules between the both countries I have to pay double tax !
    I feel this as a great unjustment towards me and my family.

    I am witing letters for 1,5 year now to so many organisations involved to this, in the Netherlands and in the US. Everybody agrees to me about the unjustice of this, but is not able or willing to solve the problem for me.

    Even to find out wether I have to pay any tax in the US will cost me more than $5000 each year for the help of financial specialist to file at the IRS without any mistakes.

    So I prefer now to renounce my US-citizenship !
    But before I can do this I have to file and pay taxes at the IRS for the last 5 years and have to pay also $2350 at the VS-ambassade for a certificate.

    For a country I have no relation with and I never want to live in.
    Too bizarre for words.
    RobGe

    • Avatar Nononymous says:

      You do not need to be compliant to renounce. This is a common misconception. (Yes, 5 years compliance plus form 8854 are needed to exit the US tax system, but that means nothing for someone who was never in it.) No proof of tax compliance will be required for renunciation.

      Simply pay $2350 to renounce, then show the CLN to your Dutch banks to lift any FATCA restrictions. No reason to waste time and money on US tax forms.

  17. Avatar RobGe says:

    I am what is called a Dutch Accidental American, born in the US in 1957 because my Dutch parents where in the US for work. When I was 2 years old my parents went back to the Netherlands.
    So I am raised in the Netherlands, have studied there and have been working for more than 35 years in the Netherlands.
    I have not studied in the US and I have never worked in the US.
    I do not have any family, friends, or assets in the US.

    Until about 1,5 year ago I was even proud with this small relation to the US.
    But then, suddenly, my Dutch bank send me papers about the FATCA agreements between the US en the Netherlands. About TAX obligations in the US I was never aware of.
    And now my Dutch bank is going to close my bank account before the end of this year, because of my birth in the US.

    Of course I have been paying taxes in the Netherlands my whole life and I could not understand why I should have to pay now also taxes in the US. For what reason, what did the US do for me to think this is right?
    I feel this as a great injustice towards me and my family.

    I am writing letters for 1,5 year now to so many organizations involved to this, in the Netherlands and in the US . Everybody agrees to me about the unjustice of this, but is not able or willing to solve the problem for me.

    Even to find out whether I have to pay any tax in the US will cost me more than $5000 each year for the help of financial specialist to file at the IRS without any mistakes.

    So I prefer now to renounce my US-citizenship !
    But before I can do this I have to file and pay taxes at the IRS for the last 5 years and have to pay also $2350 at the VS-Embassy for a certificate.

    All of this for a country I have no relation with and I never want to live in.
    It is too bizarre for words !

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

    • Avatar Sam says:

      But how did your Dutch bank know you were born in the US?
      You had to give them place of birth when you opened the account?

  18. Avatar Greg Swanson says:

    What is amazing about today’s iteration of what happened before is that America is killing any type of soft power. If you were wanting to destroy America, you would isolate it. The fact that FATCA is simply an attempt to push American’s abroad off the cliff, while using it as a revenue source is nothing but criminal. But killing all soft power is stupid.

    • Avatar Sun Tzu says:

      This is the most perplexing aspect of this money grab from expats. China is eating US lunch right in its backyard. Visit the Bahamas or Latin America (i.e. Brazil) and one will find China has become their leading trading partner. Deep State USA is increasingly worried about this encroachment and have lashed out Hwa Wei as a strawman. Of course, Deep State can’t connect the dots. If it could it would realize China does not thwart its expat community the way the US does.

      The US is all about smashing its own (the weak and vulnerable) to make a politcal point.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

    • Greg – well said.

      My personal view is that the great global conflict is largely about which country has the moral authority to lead the world. Unfortunately the USA seems intent on destroying whatever moral authority it has. Think of it as the dissipation of moral capital.

      In this context, it’s worth noting that Americans abroad constitute the fastest growing and most articulate form of anti-Americanism that exists in the world today. The comments to this post explain the reasons.

  19. Avatar Petter K says:

    I was born in the USA, by Scandinavian parents, and moved back to Norway when I was a baby so I could grow up with grandparents and other family. I have no connection to the US. It’s ridiculous that I should pay tax to a country I have never lived in, or have any memory of. The worst part, is that I have to pay to renounce a citizenship I never asked for.

  20. Avatar Karen says:

    Thank you, John, for highlighting the Expatriation Act of 1868 and the recent book “Under the Starry Flag” by Prof. Lucy Salyer. It is just incredible that the US, once a welcoming destination for immigrants, has now erected barriers to stem the flow of emigrants in the form of the highest renunciation fee in the world as well as the draconian exit tax of section 877A. The litany of recent changes in US laws in the quoted passage from Jackie Bugnion makes the hypocrisy of the current US position all the more apparent.

    For US citizens abroad, the blue passport is becoming more of a ball and chain than an instrument of freedom. As the world grows smaller due to technology, the last thing we need is more walls – either physical or financial. Congress can fix this – and Jackie Bugnion’s list provides a great starting point.

    • Thanks Karen for the comment and thanks for all the fantastic work you are doing for the people in Australia. For those who don’t know: Americans abroad in Australia are burdened by one of the least favourable U.S. tax treaties on the planet. Unbelievable how the Government of Australia has completely failed to protect its citizens (via the tax treaty) from U.S. overreach. No wonder that Karen’s blog is called: http://www.FixTheTaxTreaty.org (great name).

  21. Avatar H says:

    I am a US citizen residing in the EU. Married to a non US citizen. My partner was horrified to learn the IRS could reach his assets that we jointly. Subsequently, I’ve reluctantly relinquished ownership of all our joint assets. I no have nothing inspite of a lucrative career. I can not rebuild because US citizens are not welcomed to financial accounts apart from a non interest bearing checking account.

    I too struggle every year to pay for my US filing. Worst of all, my children have inherited this life long tax burden and have never lived in the United States.

    It truly feels like tyranny, from the country who claims to be a beacon of light for freedom and democracy.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

    • H: Thank you for your comment. You describe the reality of what I call the “FBAR Marriage” which is the marriage/partnership between a U.S. citizen and a non-citizen. There are many ways that the United States penalises U.S. citizens who marry a non-citizen. I recently did a series of video podcasts on the problem of the “FBAR Marriage” (which by the way often leads to the FBAR Divorce). One of the great questions of the 21st Century is this: “Is it the U.S. citizen or is it the alien who is the problem in the FBAR Marriage?

  22. Avatar Stephen Kish says:

    One of the commenters above tells us that “dual citizens” in Canada can live a perfectly normal life. I suggest that that statement is not true for those Canadian citizens who had their formerly private bank account information turned over to the U.S. without their consent.

    For those interested in an actual specific plan aimed at killing the FATCA compliance law in Canada (with implications for ending similar compliance laws in other FATCA’d countries) consider supporting our FATCA IGA legislation lawsuit that is now in the hands of the Federal Court of Canada.

    The Plaintiffs in our lawsuit are two brave Canadian citizen women, Gwen and Kazia — and the Alliance for the Defence of Canadian Sovereignty (ADCS) is the sponsor. The Federal Court decision on our lawsuit will be announced in three or so months from now, and we will then be seeking financial support for the appeal (there will be a costly appeal no matter who wins).

    You can help by supporting the legal costs of the appeal.

    Our ADCS website containing our court submissions is here: http://www.adcs-adsc.ca/CourtSubmissions.html See also: http://isaacbrocksociety.ca/2019/01/23/live-feed-anticipated-for-january-28-2019-canadian-fatca-iga-trial/

    Stephen Kish, ADCS Chair — John Richardson (above) is our Co-Chair and Legal Advisor

    • Avatar Nononymous says:

      A Canadian who has had their financial information reported under FATCA (against their will or otherwise) can still life a perfectly normal life in Canada insofar as they are not prevented from opening any type of account. They can invest however they see fit, with any financial institution. Fortunately Canadian banks don’t seem to be as terrified as European banks.

      Nor does FATCA reporting suddenly compel these Canadians to become compliant with US tax requirements. At present the IRS appears to do nothing at all with FATCA data it receives for non-compliant individuals. One day in the future it might begin sending out postcards. But that doesn’t change the fact that the US has no power to collect or otherwise enforce its tax laws against Canadian citizens in Canada, as laid out in the tax treaty. That may change in the future, but for now, as Andrew Grossman, just wrote, “for want of funding and having closed its offices abroad, the IRS has engaged in little enforcement against those without income, assets or heirs in the USA.” (More fundamentally, it engages in little enforcement abroad because it knows perfectly well that it has no legal basis to do so, and there’s not much ROI in trying.)

      I will grant, however, that individuals with signing authority over employer’s financial accounts may need to choose between renunciation and keeping their jobs. That is one example of normal life not being possible with US citizenship.

      • Avatar Nononymous says:

        PS Just so we’re clear, FATCA is a bad thing and the IGA needs to go. The lawsuit will hopefully succeed. But telling dual citizens in Canada that FATCA means they must come into US tax compliance, or that they won’t be able to invest or save, is just wrong. It scares people into expensive, unnecessary US tax compliance. Which is very good business for lawyers and accountants of course.

        • Avatar Patricia Moon says:

          With regard to Nononymous’ reply to Stephen Kish:

          “PS Just so we’re clear, FATCA is a bad thing and the IGA needs to go. The lawsuit will hopefully succeed. But telling dual citizens in Canada that FATCA means they must come into US tax compliance, or that they won’t be able to invest or save, is just wrong. It scares people into expensive, unnecessary US tax compliance. Which is very good business for lawyers and accountants of course.”

          I am not sure what you are clarifying. It sounds as if you are suggesting that ADCS-ADSC is telling people they must come into US tax compliance etc. With all due respect, to the best of my knowledge, we have never officially taken any position with regard to tax compliance, etc. Our focus is on the privacy and discrimination aspects of the IGA given Canada’s Charter of Rights and Freedoms. It is completely wrong to suggest a stance we have not taken as well as always representing no action is necessary on the part of the expatriate. This ignores what is wrong with the situation and is a solution only for some individuals.
          Your position (whether you intend it or not) also indirectly encourages people not to engage in a process of change regarding these Charter violations. If everyone just sits back and looks after themselves, there will never be a way to get rid of this obnoxious nonsense that the U.S. has inflicted worldwide. Surely one should recognize that the situation is much larger than just one’s own problem. If people only approach this from their own individual need, there is virtually no chance the lawsuit can continue. Nor will any future efforts from other countries…..

          In any event, all should know that Nononymous’ comment DOES NOT represent the position of ADCS-ADSC. Along with Stephen and John, I am the Secy-Treasurer of ADCS-ADSC and Carol Tapanila is Director.

          • Avatar Nononymous says:

            I won’t continue a debate that has already burned itself out on another forum. My original comment here was in reply to John Francis, who claimed that US citizenship meant he could not invest in TFSAs or RESPs or otherwise “live a normal life” in Canada. This is demonstrably untrue, though it could be true in other countries. That was somewhat lost in the confusion of threads here; I made no suggestion that this is somehow the official position of ADCS.

            At heart there will always a certain amount tension between creating awareness and support for the lawsuit, on the one hand, and educating people as to the ease and safety with which they can continue to live normal lives free of US interference by ignoring their US tax obligations. (In Canada – it’s a whole different ball game in countries where banks are restricting services to anyone with a US birthplace on their ID.)

          • Patricia – thank you and well said. The mandate of ADCS is to attempt to get the FATCA IGA struck down as being unconstitutional. This would benefit ALL Canadians whether they are U.S. citizens only, Canadian citizens only or dual citizens. It would benefit people whether they filed U.S. taxes or not. The FATCA is that every Canadian resident would benefit from having FATCA gone. The termination of FATCA is the ADCS goal. As long as FATCA exists “U.S. persons in Canada” will think about the issue of U.S. taxation in Canada. Better to have it gone altogether.

            On a personal note – thank you for your absolutely incredible work, devotion, commitment and effectiveness. You are appreciated far more than you would ever imagine!

            John

          • Again my apologies for posting out of sequence….

            John, perhaps not only for Canada but for the rest of the world as well.

            Looking forward to the French litigation and hopefully, more to come from other countries.

            I do appreciate your kind words which could easily be extended to yourself and others who have devoted enormous time and effort trying to address these issues to get real change whether via lawsuits, getting MOC to write legislation, etc. etc. Clearly, it is going to take a lot more of the same over time. Hopefully more will get involved as this effort moves forward!

          • I cannot “reply” directly to Nononymous’ comment below because the format here is not giving me the option.
            With regard to arguing that the subject has been burned out on another forum so he will not continue it here is curious. I was not part of that discussion nor were the majority of people on this thread and possibly the readers of the thread here as well. The placement of your comment directly below Stephen Kish’s can prompt one to assume it was in response to his comments. Readers who may be new to the subject might come away with the impression that ADCS-ADSC promotes compliance, lying to the banks and other positions that could also be “lost in the thread.” There is a difference in an individual such as yourself taking a position and a non-profit organization doing so. In the same way you feel compelled to answer those who are new to the situation, naturally, we respond when a position is promoted without taking into account the effect it may have on the Canadian FATCA IGA lawsuit. Our supporters would expect us to do so given those “little guys/minnows” sacrificed a great deal to come up with nearly $600,000 to make the suit possible.

            https://encyclopedia.ushmm.org/content/en/article/martin-niemoeller-first-they-came-for-the-socialists

            The moral is: Better that they not be able to come at all:

            First they came for the socialists, and I did not speak out—because I was not a socialist.
            Then they came for the trade unionists, and I did not speak out— because I was not a trade unionist.
            Then they came for the Jews, and I did not speak out—because I was not a Jew.
            Then they came for me—and there was no one left to speak for me.

      • I don’t think it can be said that a person who has had their information turned over can “lead a normal life in Canada.” Perhaps in theory but imagine how one would actually feel, were this the case. Opening oneself up to more exposure by obtaining new accounts or investments? Putting more money at risk? Taking a chance by lying knowing one has already been turned over? I sure wouldn’t and I bet there are others who would not either.

        I can easily imagine people who have been posting under psuedonyms for years would likely not feel particularly safe if suddenly their information were turned over or if their names became known. This is just common sense.

        Perhaps some can/will/are living normally by remaining under the radar but their approach will not work for all. It is simply inaccurate to suggest otherwise.

        People who have been compliant for decades, long before any of this began circa 2009 certainly cannot live a normal life in Canada. Information about lying to the banks is totally useless to them. What to say of information about lack of enforcement potential, ability to collect and so on.

        And what of those who want to be compliant for whatever reason? There is nothing wrong with that if a person so desires.

        The situation is much broader than simply trying to get around FATCA by ignoring it.

  23. Avatar amy bee says:

    As a Swiss resident but American citizen, there is exactly one bank willing to have me as a customer, due to all of paperwork and filing requirements.

    To remain compliant, I have to pay $1500 a year just to prepare my US return because of the complicated and onerous (intentionally so?) task of reporting foreign earned income and all that goes along with it.

    As an American abroad, my freedoms are diminished: when I cannot chose the bank, how to save (and certainly not effectively save) for retirement, or how to operate my business without facing major issues from the US, then all of my supposed great American freedoms are for naught.

  24. Avatar Aimee says:

    I fully live and work in the UK, and having married a UK citizen am a dual American:BRITISH citizen. I intend to stay here until I die. And yet I feel persecuted because of our situation. I cannot save nor invest like a normal UK citizen does. I must constantly looking over my shoulder to what might possibly wrong with IRS reporting requirements because of my double status. This is a very expensive process and one that I cannot afford. I feel my own American government is punishing me because I moved away from the USA for love. We seem to be the only country in the world besides Eritrea that does this to its own citizens. Is there anything you can do in your position to help this cause?

  25. Avatar Simon Manning-Press says:

    How the hell can I afford to pay a US tax expert to navigate a foreign tax system on top on my native UK HMRC obligations? This discrimination against dual nationals who have never lived or worked in the US is surely an abuse of my human rights, not that I can afford a lawyer to help me with even understanding that. I feel totally powerless and abused by the US state!

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

  26. Avatar Andrew Grossman says:

    Lucy Salyer’s PhD dissertation was published as “Laws Harsh as Tigers: Chinese Immigrants and the Shaping of Modern Immigration Law”, Chapel Hill, Univ. of North Carolina Press, 1995. Like Candice Dawn Bredbenner (“A Nationality of Her Own: Women, Marriage and the Law of Citizenship, Univ. of Calif. Press, 1998 (thesis, Univ. of Va., 1990: “Toward Independent Citizenship: Married Women’s Nationality Rights and the United States, 1855-1937”)) she concerned herself with the iniquity built into American citizenship and its notions of “allegiance” — something that continued through WW II and the incarceration of Americans of Japanese ancestry. Native Americans were not citizens until 1924 and the status of persons born or naturalized in outlying possessions of the USA (and most especially the “noncitizen nationals” of American Samoa and Swain Island) as having (a perhaps revocable, depending on what SCOTUS may have to say) “statutory” and not “14th Amendment” attachment to the USA demonstrates the inherent racism and historical anomaly of the law of “allegiance”.

    Something inherited from Britain: Calvin’s Case http://www.uniset.ca/naty/maternity/77ER377.htm ; Aeneas Macdonald http://uniset.ca/naty/maternity/aeneas_macdonald.htm ; Chamberlain’s Settlement http://uniset.ca/other/cs2/19212Ch533.html and many more; commentary by F.T. Piggott http://uniset.ca/naty/maternity/ligeance.htm ; Clive Parry http://www.uniset.ca/naty/parry.htm and it goes on. There is no logic or sense, other than political expedience, to what is American nationality law today — and indeed it’s not “nationality” at all, if you consider the culture and the popular hostile attitude towards expatriation but “allegiance” — and the happenstance of its assignment with lifelong tax obligations, reinforced by Saving Clauses of tax treaties. Will there be a rethinking of the American concept of allegiance and its associated obligations? Given the current political climate in Washington it’s hard to be optimistic. Even in Revolutionary and post-Revolution times the USA had difficulty in defining “who was American”: those were times when title to land (and its inheritance) might depend on citizenship and there was an ebb and flow of population across the Canadian border.

    It is not just taxes but political and religious loyalty: “treason” in the form of allegiance to ISIS that may hinder a change in thinking among those who legislate and regulate. The image of wealthy “tax cheats” — whatever the origins of their presumed wealth — and the invisibility of the masses of middle and working class “expats” adds to this. And for the USA, its tie of allegiance pre-empts nationality claims of any other country.

    Because the USA cannot know who all its citizens are — only those born in the USA or whose birth has been registered with a consular office — nor where they are, it has contracted out enforcement abroad of the obligations of allegiance. This includes certain present and former “long-term residents”. The “badges” of allegiance are listed in the FATCA Inter-Governmental Agreements. There must be countless false positives, not least because a VoIP telephone number with a U.S. area code, U.S. mailing service (like earthclassmail.com) or a U.S.-based trustee or signatory implicates FATCA obligations. As time goes on one will see whether and how the authority to revoke U.S. passports of tax debtors affects those who “can’t pay, won’t pay”. And pehaps to what extent, like Brexit, FATCA leads to a search for alternate or additional nationalities.

    It is, in recent decades, SCOTUS that has defined and redefined “who is an American”. Years after the Cable Act Terrazas and Afroyim cases virtually abolished non-wilful expatriation. More recently, with Ruth Bader Ginsburg’s June 2017 opinion in Morales-Santana, SCOTUS invented a prospective law of attribution of nationality for persons born abroad to one U.S. parent. Admittedly her criterion was suggested by the State Department; but cynically she proposed that the Congress should promptly enact a new law. It is hard to imagine that either State or Ginsburg addressed a thought to those curious cases where a child born abroad to a U.S. citizen mother will now be a citizen, but who would not have been under old law: one has to think of a daughter of an overseas U.S. Government employee who for whatever reason has never spent 365 uninterrupted days in the USA, but has collectively been an overseas dependent for five years. The pre-Morales-Santana scheme is discussed in an article by Vice Consul Amelia Shaw: http://www.afsa.org/citizenship-and-unwed-border-moms-misfortune-geography

    What of all the “citizens” whose births were never registered and who do not wish to owe allegiance or pay tax or be subject to American laws of treason or subpoena (Blackmer v. United States, 284 U.S. 421, 437 (1932))? It is known how many passports are issued abroad to citizens living abroad. And it is known how many tax returns are filed from abroad (and presumably, although the data are not published, how long such taxpayers have lived abroad). The “9 million” expats figure is probably a myth, unless it assumes millions of unknown and unwilling citizens. And it creates a problem: once we suppose that millions of overseas citizens are noncompliant with tax obligations we lose respect for the law. And we also see that, for want of funding and having closed its offices abroad, the IRS has engaged in little enforcement against those without income, assets or heirs in the USA. It is not good for a legal system to have laws that are scorned: but that is where we are.

  27. Avatar Don Heater says:

    What can one say that hasn’t already been said, a once proud America, and now so ashamed of what the American government is doing is nothing short of financial war fare on the world. If this isn’t stealing I don’t know what is. Expats have payed there taxes to the country they reside in, for America to tax them again is just stealing from that country’s tax base, France and Europe have woken up to it and the rest of the world will to.

  28. My 2 comments regard two sets of comments made above:
    1) “not being able to invest for retirement in my TFSA / RESP (Canada’s ROTH IRA) which is taxed as a foreign trust.” This is an incorrect statement. IRS has never opined that TFSA / RESP is a foreign trust. Thus, it’s up to law interpretation. Some practitioners have very logically proven why these accounts cannot be foreign trusts under US tax law. No practitioner has very logically proven why these accounts are foreign trusts under US tax law. Many practitioners prepare Form 3520 for clients with such accounts to report to IRS as foreign trusts. Why so? On the X% percent chance (let’s call this 1/2 %) that IRS will one later day penalize their client for not filing 3520 for TFSA / RESP and that client will angrily cycle back to that practitioner, there is no upside to that practitioner to instead follow Y% chance (let’s call that 99 1/2%) that TFSA / RESP are not foreign trusts.

  29. 2) Those thinking that by officially removing themselves from bank accounts leaving them in ONLY NRA spouse’s name provided FATCA/FBAR protection are miscalculating the laws and may one day be faced with a rude awakening. Listen to the free IRS FBAR webinar where an example of FBAR violation is a USC/resident who vacations in Europe and accesses his local brother in laws account for some local currency cash but then doesn’t report that account on his FBAR!

    • Avatar Nononymous says:

      The absurdity of that example is almost an admission by the IRS of how hopeless they are at touching enforcing FBAR and tax compliance against non-residents.

    • Avatar Andrew Grossman says:

      We were discussing this about a client today: the situation where a dual national was removed (or never appointed) as a signatory of a corporate account but as a bookkeeper operates the payment scheme and the online banking facility. S/he, just like the spouse who knows the PIN of the NRA’s bank account, is subject to the FBAR and 8938 regime.

      “Come and get me, Copper!”

      As I wrote elsewhere, a collection of laws that cannot and are not enforced — except against those poor slobs who get cajoled into a confessional compliance scheme by accountants and lawyers for their own profit — only bring the legal system into scorn.

      I remember during an estate audit during the Carter years when FEIE was abolished mentioning to the IRS auditor Amcit schoolteachers I knew of in Nigeria and Japan who, if subjected to US income tax on housing and transport would owe more in tax than they earned. The auditor grimaced and conceded that the IRS would never look for such cases and would only deal with such as “were brought to their attention.” Hey, isn’t that Dewees and all the other cases where “professional ethics” “required” the ruination of the client?

      • Avatar Nononymous says:

        Mr. Grossman, I think you should write an article here on the subject of professional ethics and responsibility as it concerns the matter of tax advisers steering clients into destructive, expensive and unnecessary US tax compliance. Perhaps some of the other authors on this blog would pause and feel a sense of shame, were they to read it.

  30. Avatar Karine says:

    I am a French citizen living in London. I was born in the US and resided there until i was 6 years old.
    I never went back to live there. In 40 years, i probably spent about 2 weeks of my life on US soil for holidays and work.
    Yet, when i decided to start the streamline process to ‘put things right’, encouraged by scaremongering Tax advisors, i was told that i would have to pay $30,000s of taxes minimum, just as a start, because i had had the bad idea of creating my own Limited company, here in London, to work as a consultant.
    The new US tax laws meant for the owners of big corporations like Amazon, when applied to me, meant that all my savings, left on my companies account were taxed the same way as them!
    This is not accounting for the $5,000/year cost of the tax advisors themselves because, of course the whole process is impossible to do on your own.
    This is not mentioning all the complexities that i discovered: having a stock ISA (UK saving type), French Life insurance etc etc, all incompatible with the US tax system. And i had no idea!
    i can empathise will all these comments. My parents were proud, they had worked hard, while in NYC and were delighted that maybe one day i could use this passport again but all it does now, it is coming to haunt me…

    • Avatar Nononymous says:

      Karine, you need to cut your losses and immediately cease any attempt at US tax compliance. Spend $2350 to renounce US citizenship so that you are not restricted in what financial services are available to you, but waste no further time and money on expensive, destructive and ultimately unnecessary US tax compliance. (Note that you do *not* need to be compliant to renounce.)

    • Avatar Andrew Grossman says:

      A “stock ISA” (I assume you mean a share ISA not invested in a fund or trust subject to PFIC rules) is no big deal, And you are lucky you are in the UK where the tax treaty removes pension funds and SIPPs — even Junior SIPPs for infants — and US Roth IRAs — from consideration. You may have been taken for a ride: some advisors (of whom some (like us) would waive their fees so as not to be subject to crude “ethics” rules that require professionals to enforce even foreign tax law. There is a 6-year (effectively 7-year) statute of limitations on FBAR noncompliance. For some, it is a good bet. As for life insurance: US policies are cheaper, if you can get one. Otherwise term insurance. An advisor of integrity might have advised you for free and counselled you to do your own tax returns on TurboTax.

      • Avatar Cayman says:

        Andy – but what happens with international people who end up with pension savings in multiple countries but resident in only one so only one tax treaty applies. My friend has pension type plans in Vietnam, Australia, UK, France and Spain. He can not withdraw those funds until retirement. He only has treaty protection in his country of residence. He worked in the US only for 3 years when posted there as an expat (ironically) so has no US savings or social security.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

  31. Avatar Gabriella Rossi Crespi says:

    I’m an accidental american and FATCA is a bed dream.
    I’ll probably renounce to my US citizenschip. My entire life is in Italy.

  32. Avatar Stephen Arvay says:

    Good for you! Expose this for what it is, Taxation Without Representation! Had written that specific point in a letter to my Congresswoman in 2015 ! From my letter [Elise M. Stefanik FATCA Letter March 18, 2015.pdf]

    “The problematic issue is that the US is attempting to enforce (CBT) Citizenship Based Taxation around the
    World, under threat of sanctions in the form of 30% withholding for (FFI’s) Foreign Financial Institutions that do
    not report on US Persons.. The U.S. and Eritrea are the only two countries that tax based on both residence and
    citizenship. There must be a better and more equitable way and am hopeful for a clear resolution on change in the
    future. If I were already living back in Canada, who would be my US Representative? As a US Citizen, under
    the current FATCA laws, I would have to fill in the forms and submit any tax due. That is what the US
    Government would expect of me. Conversely, where would my US Government Representation be? About
    Seven Million Americans live oversees and have no Congressperson to write to! Taxation Without
    Representation? Sound Familiar in historical terms? Other considerations are privacy laws in both counties,
    safeguarding of personal
    information, right to Due Process along with the excessive potential penalties.”

  33. Avatar Kym Kettler-Paddock says:

    I live in Hong Kong and am married to a Brit. Our home base is The Netherlands. We have to pay taxes in Hong Kong, The Netherlands, and the US.

    If we pay off extra on our mortgage for our family home in The Netherlands, the US assesses a deemed capital gains tax on the currency fluctuations on that lump sum. It’s outrageous. The house was bought in euros via an European bank and paid for by euros earned by my British husband.

    In addition to what others have said about the difficulty investing abroad, the US is making it increasingly difficult to invest in the US. If you keep your 401Ks, you may still invest in mutual funds. If you roll those out into IRAs, you may no longer invest in mutual funds of any sort and may only invest in individual stocks.

    For self-employed and unincorporated overseas American entrepreneurs, there is also a 15% Medicare tax that is not offset by FEIE or any other tax credits.

    Overseas Americans should be freed from this onerous and unjust scheme of unjust taxation.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

    • Thanks Kym – actually with regard to the mortgage payback the gain is taxed as ordinary income and not as a capital gain (making the tax bite worse than you are describing). Also, any losses are of course NOT deductible. Yes, it’s absolutely outrageous. Any U.S. citizen who commits finance abroad is basically tethered to the U.S. dollar and therefore everything he or she does (with a small exemption) is taxable. Definitely the most egregious crime committed against Americans abroad.

  34. Avatar Hannah says:

    I was born in & lived in the US for 6 years as a child. I never worked in the US and do not intend to ever move back there. My American citizenship used to be something I was proud of. Something I’ve always regarded as positive. Up until I found out about these ridiculous obligations. I feel criminalised & disillusioned.
    I have just begun the process of complying (perhaps seen as a mistake by many Accidentals) but I see no other choice as a law abiding citizen. I am lucky in that I am young and don’t yet have any large assets. But I now have an extremely difficult decision: to renunciate or not. Being American has always been a part of me & now I have to decide whether or not to disregard that part of my life in order to be treated justly in the country I call home (UK)? It’s so unjust. Not to mention the toll on my mental health.
    Of all the people I’ve spoken to about this issue, not one understands or can justify it, but nothing is being done. Not only that but it’s be almost completely disregarded by UK MPs. So I’m being let down by both countries that I am a citizen of. I’m sickened by the whole process. I’m just pleased I have found a US/UK accountant who knows what he’s doing & can support me through the process.

    • Avatar Nononymous says:

      Hannah, you know the answer – don’t go down the path of compliance, it’s going to be an expensive mistake. Being a “law abiding citizen” is no virtue when you’re spending money to abide by the laws of a country you don’t live in, laws which cannot be enforced.

  35. Avatar JBaugher says:

    Remember when you used to be proud to be a US person abroad and defended the US in discussions with anti-American residents in the country you live?

    Now most Americans abroad agree with those locals and even shock them when we further educate them what the US does to even its own people.

    100% those locals come away from those conversations with even less respect for the US government. Which they then pass onto others.

    Having 3-9 million pissed off Americans abroad is an absolute PR disaster for the US.

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

      • “Having 3-9 million pissed off Americans abroad is an absolute PR disaster for the US.”

        You are absolutely correct. It is very sad. But unfortunately, Congress can’t see or understand this.

        I believe that these abusive laws are going to have a huge impact on America’s ability to effectively compete for the immigrants it wants to attract. As it stands, when potential green card holders learn about the Sec. 877A Exit Taxes they are less likely to come to America and more likely to leave America.

        Why not immigrate to Canada (yes) or Australia or other countries and avoid many of these problems?

  36. Avatar Ardath Bei says:

    I have been thinking of renouncing my U.S. citizenship after almost 50 years abroad. It is with a heavy heart but I resent the extraterritorality of U.S. tax policies and my foreign spouse absolutely refuses to give any info to the IRS. Our assets are from French sources and we pay our taxes in France. I never thought I would come to this point. When I called my Congressman’s office about FATCA his staff didn’t have any idea of what I was talking about. This is adding insult to injury. As a dual citizen I have always been a good-will ambassador for the U.S. This will never be the case again whatever the outcome of this problem will be! The U.S. is loosing the support of its own citizens abroad!

    • TaxConnections Admin TaxConnections Admin says:

      Thank you for your reply. Please forward this post to as many expatriates you know to read the article and share their own personal stories.

  37. Avatar Jr says:

    As an accidental I wince every time I hear Americans declare their attachment to founding principles of the nation whilst as an accidental I witness on a daily basis how the US rides roughshod over the fundamental right to expatriate as described in the article above and the principle of no taxation without re-resentation. Fortunately for us European politicians are waking up to the issues and slowly starting to confront them over this gross US overreach. https://youtu.be/1V3RgduPZdk Latest debate in the EU
    Parliament can be watched here.

    • Avatar Loe says:

      And more from the EU Parliament, wake up US, listen to your allies… https://m.youtube.com/watch?v=t_Il-rL5TiI

      • Thanks for sharing – this is from an EU hearing – very articulate and powerful testimony about FATCA and accidental Americans. There are few countries that confer citizenship based ONLY on birth in the country. There are only two countries that impose worldwide taxation based ONLY on citizenship. The USA is the only country that does both. This means that US tax residency can be characterised as “Place of Birth Taxation”. Kind of gives the Springsteen song “Born In The USA” new meaning.

  38. Avatar Repeal FATCA says:

    FATCA is ruining my family…can’t get a mortgage nor other retirement products. Tax filing costs are burdensome and complex…the amount of stress it causes me and my family is sickening…we will renounce soon and then what? Well why would be pro American anything anymore? In short America just took took and took from us…we shall give nothing back. Ever again!!!

  39. Avatar Ronald says:

    Like many other here, I was born in the us in the 60‘s, left as child, educated in a different language. I was totally suprized by C B T. Can one even imagine, what it means to deal with us tax code in a for you foreign language? It feels like beeing born at the wrong place.

    It is not acceptable, that my us birthplace is limiting my life in the country of my parents in terms of banking nor beeing punished to fix this by paying randsome of 2350 usd.

  40. Avatar Suzanne says:

    – Left the US as a minor in 1968.
    – Was completely unaware of US tax filing obligations until big media push in Canada in 2011.
    – Scared into entering OVDI by IRS Commissioner saying it was my “last, best chance to come into compliance”. Paid six figures in tax and accounting fees on the sale of my Canadian home in 2008 and 8 years of tax returns.
    – Spent approximately three years transitioning into Streamlined.
    – Pay approximately $3,000 annually in accounts fees alone to stay US tax compliant.
    – Put off renouncing in hope that US tax reform would bring tax and reporting relief to Americans abroad.
    – 2017 Tax Cuts and Jobs Act hits me with Transition Tax and GILTI, effectively putting my small Canadian corporation out of business.
    – Because of Transition Tax and GILTI, must make decision whether or not to continue filing.
    – Heavily regret that I ever entered the US tax system.

    • Thanks for sharing. Your story is one of many that demonstrates what happens to many who “do the right thing” by entering the U.S. tax system. Hardly a week goes by where I don’t here a story about somebody who: (1) entered the U.S. tax system in the last five years or so (2) had a small business corporation in Canada and (3) then had a good part of the retained earnings of the Corporation stolen via the Section 965 transition tax. As I continue to say: #YouCantMakeThisUp!

  41. Avatar Lisa says:

    I was born in the States to Canadian parents attending university and returned to Canada when I was 2. I have not lived in nor travelled extensively in the United States since that time. Why should I have to file a tax return when I do not earn any money in order to report bank account information for money earned solely by my Canadian husband to support myself and our 5 children who I stay home to homeschool? Why should we have to pay taxes on our family home which has been paid for exclusively through the efforts of my hard-working Canadian husband to a country which we don’t live in, work in nor receive any benefits from whatsoever??

    Sounds exactly like why the War of Independence was fought.

    I was always proud of my unique birth story and dual citizenship and would gladly share when asked. I have had my children learn US history not only because it’s fascinating, but also because of my connection to the States. I will continue to have them learn US history, but will be including this book in our studies & discussing how FATCA has changed my view of my birth country.

    I am so grateful to be a Canadian.

    • Avatar Nononymous says:

      Lisa, I hope you are not attempting to comply with your US tax obligations, because there is no reason for you to do so. US tax law is unenforceable in Canada, and with no US assets or income you are currently quite safe. Compliance can be an expensive mistake, so keep yourself off the US radar. (A polite “no” is all you need to say when a bank asks about US citizenship – FATCA problem solved.)

      As you may be aware, if you only lived for 2 years in the US, as a child, your own children will not have inherited US citizenship. They will be safe from this silliness.

  42. Avatar Sam says:

    John, can you use your reach and influence to help organize email blasts to specific congresspeople on specific days?

    What we really need is a congress person who serves Americans abroad. That is what we should be fighting for, because that will resonate with people as fair. No existing congressman wants to support Americans abroad with their taxes, they’ll be seen as helping the “fatcats”. But representation is seen as fair

  43. I served in the US Army, fled the US to find work during the dot-com crisis and then had to renounce US citizenship to refinance my local mortage due to discrimination caused by immoral FATCA.

    Americans living abroad have no representation and US politicians don’t care about their expat population, enabling compliance vultures to profit from the harms they caused to vulnerable emigrants.

    As it stands right now, the renunciation of US citizenship is the only means that US emigrants have to protect themselves from the non-compliance of government corruption and the greed of criminal organizations.

  44. “every transaction that Kate enters into will be seen as a cross-border transaction by the IRS, even though all parties may be Australian citizens resident in Australia.”

    https://theconversation.com/gop-tax-law-snubs-us-expats-and-accidental-americans-91710

    Once resident overseas the U.S. provides ZERO resident services or local protection of property and individual rights in exchange for the double taxation + extra reporting + extra penalties. Thus the one-way double tax claim is unjust. It represents tax cheating by the U.S. Government.

    Based on the numbers of 9 million U.S. persons resident overseas, the U.S. should pay $113 billion in resident services to them each year based on U.S. federal spending per U.S. resident.

  45. Avatar Stephen Kish says:

    Lisa, You and I are both very “grateful to be a Canadian”.

    But please appreciate that it is our/your own country, Canada, that in two successive governments (Conservative and Liberal) decided to comply with the United States FATCA law to turn over our private bank account information to the IRS, resulting in the loss of our/your Charter rights. The CBC told us recently that info on 600,000 accounts/year is being turned over.

    I can understand why a major focus in this tax post is on changing the tax law of what is now to me a foreign country, but everyone please consider that we also need to change the way our own countries deal with United States demands/threats of harm that take away our Constitutional rights.

    We need to teach Canada (and by implication, other countries) that it is wrong to comply with the U.S. bully: Our ADCS lawsuit, which we hope the public will support, has already reached the Federal Court of Canada stage (decision expected in three or so months), but there will be a costly appeal no matter who wins.

    It’s not just the U.S. that is doing us harm.

    Stephen Kish,
    http://www.adcs-adsc.ca/

    • Stephen – thanks for your leadership, persistence and focus in keeping this lawsuit going.

      A couple of FATCAoids:

      1. The Government of Canada was a world leader (being one of the first countries) in FATCA capitulation.

      2. The people of Canada (via ADCS-ADSC.ca) are world leaders in fighting back against Governments who are known FATCA capitulators.

      France and the rest of the EU are playing “catch up”.

    • Avatar Lisa says:

      Yes, I do “appreciate” that fact. Thank you so much for fighting for the return of our rights which have been given away. I wish I could be more vocal in my support of your work and my opposition of this travesty, but I feel the need to protect my family despite the fact that currently there is no recourse for the US gov’t to force compliance.

  46. Avatar Laura Wilson says:

    As a retired senior citizen living off a modest fixed retirement income (all earned outside of US) I had no other choice but to renounce US citizenship. The untold stress and terror US has inflicted upon its citizens abroad qualifies as elder abuse for retirees.

    Having been a proud American, “Daughter of the Mayflower”, supporting my once beloved nation to those in my home country, I quit. Any movement advocating to boycott, divest and sanction US will now have my full support; all soft power good-will emanating from my corner destroyed for a pittance.

    • Laura thanks: You are making a point very clearly and succinctly that people usually don’t make. The point is that the renunciations are forced renunciations (at least among those who attempt tax compliance). For Americans abroad, coming into U.S. tax compliance is (because of the stress, complexity, uncertainty and emotional + financial cost) the first step to renunciation.

      And yes it is a form of “Elder Abuse” (although I had never thought of it in quite that way).

      (Actually the great thing about the U.S. tax system is that (although it is Elder Abuse), it’s actually an abuser of all Americans abroad. It just abuses them differently, depending on what stage of life they are in.)

  47. Avatar Lucas Adams says:

    Being a dual citizen living in Canada and owning/running a small business this is a huge burden financially. It is also so complex it is overwhelming and is you never know if you are compliant. Also called the senators office from my home state in the US to only fall on def ears. Citizens living abroad mean nothing to the US except for collecting unfair taxes.

    • Lucas – right on. You say that “you never know if you are compliant”. Actually there are only varying degrees of noncompliance. The basic problem of tax compliance for Americans abroad (in Canada or anywhere else) is: understanding what is actually expected of them.

  48. Thanks to all for for sharing your thoughts and experiences. As bad as this situation is, it’s compounded by the fact that the USA is actually imposing (in effect) a separate and more punitive tax system on Americans abroad who are also tax residents and often citizens of other countries. Again, by living outside the United States you are actually being taxed more punitively than if you lived in the United States! My next post will discuss this in detail with numerous specific examples.

  49. Avatar James Huber says:

    (1/3) Great write up. Thank you Professor Salyer, Ms. Bugnion, and Mr. Richardson.

    I was born in the US before moving to Canada with my parents at age 5. My mother and her family are Americans. My father and his family are Canadians. I am a US/Canadian dual citizen and very much identify as such. I won’t let anyone take that from me and therefore won’t renounce.

  50. Avatar James Huber says:

    (2/3) Despite my American pride, I have lived and worked in Canada nearly my entire life. My family and I have a Canadian education, we receive Canadian healthcare, and we drive on Canadian roads. I receive all the benefits of being a Canadian citizen, and believe me, as a working professional, I pay for them with my very high Canadian taxes. Therefore, all the historical and philosophical stuff aside, there is no practical reason that someone like me should owe any taxes to the United States, since the US government provides no service to me or my immediate family.It can’t even be argued that I should pay US taxes for national security/defence, since the Canadian government is extensively partnered with the US on this issue.

    • James – thanks for your series of comments. Your second comment includes:

      “Therefore, all the historical and philosophical stuff aside, there is no practical reason that someone like me should owe any taxes to the United States, since the US government provides no service to me or my immediate family.”

      Although I agree with you, I think the justification for U.S. taxation is not based on the premise that the Government should provide services to the citizen. It is based on the premise that it is the duty of the citizen to support the Government. From a U.S. perspective it is probably better to impose taxation on people that would NOT be users of Government services. 1/2

    • James – continuing

      As Justice McKenna wrote in the 1924 case of Cook v. Tait (still cited by the CBT proponents):

      “… the power to tax was not and cannot be made dependent upon the situs of the property in all cases, it being in or out of the United States, nor was not and cannot be made dependent upon the domicile of the citizen, that being in or out of the United States, but upon his relation as citizen to the United States and the relation of the latter to him as citizen.” 2/2

  51. Avatar James Huber says:

    (3/3) Double taxation is certainly recognized by the US/Canada tax treaty, but it only goes so far. I used to prepare my taxes myself, but since I’ve started my career, paid off my student debt, and started to build assets, my taxes have become enormously complex. My preparation fees alone are going to cost me on the order of FIVE THOUSAND DOLLARS this year. That is simply ridiculous. It is also ridiculous that the US effectively disallows me from using (or so several accountants have told me) well-recognized Canadian investment vehicles such as the TFSA, RESP, and a professional corporation. To top all that off, none of this extra money I’m spending on taxes and fees is even going to the US economy nor the US government. It’s all going to my Canadian accountant and the Canadian government!

    CBT and FATCA need to end. Let’s make this happen.

  52. U.S. tax and compliance laws apply Kafkaesque double taxation on U.S. persons tax resident overseas. There are extra U.S. penalties, tax, and disincentives for money, accounts, pensions, and investments in countries other than the US; even if you live permanently overseas, and you already pay a fair share of tax to the country you live in, often at higher rates than U.S. taxes. In an increasingly global and mobile world the US should not punish the 9 million US person family members living, working overseas, and expanding US influence and trade overseas.

    Once resident overseas the U.S. provides ZERO resident services or local protection of property and individual rights in exchange for the double taxation + extra reporting + extra penalties. Thus the one-way double tax claim is unjust, is un-American, and represents tax cheating by the USG.

  53. From: A March 6 2018 article in The Conversation: GOP tax law snubs US expats and ‘accidental Americans’

    “Most of Kate’s problems emerge when she tries to take part in a variety of other normal aspects of living somewhere for any significant period of time, from saving for retirement to buying a home. And in general, the exclusions and credits intended to prevent double taxation won’t be sufficient.”

    “Essentially, every transaction that Kate enters into will be seen as a cross-border transaction by the IRS, even though all parties may be Australian citizens resident in Australia.”
    !

  54. Can we agree to stop using the language of our oppressors? Citizenship-Based Taxation, needs to be replaced with Citizenship-Based Double Taxation. The double taxation is what is objectionable. The U.S. can tax their resident citizens however they wish.

    Also, the US needs to stop DOUBLE taxing residents of other countries.

    Also the definition of “preventing double taxation” needs to change:
    From: No higher than the highest rate for each country (split into a number of different taxes).
    To: If one lives in another country and has zero income and assets in the U.S. then there should be no extra tax and no extra compliance to the U.S.

    • Why call it anything other than an unjust extra-territorial application of U.S. law. I agree it should not be called “citizenship-based taxation” (makes it seem sort of patriotic, well maybe). Why not just say:

      “The United States should not be imposing worldwide taxation on people who are tax residents of other countries and do not live in the United States.”

      Nobody would disagree with this. It is simple. It is logical. It avoids the stupid issue of what is the meaning of citizenship. It focuses the thinking on people should pay where the live. It unifies all the affected people because it accurately describes what must stop.

  55. Avatar Greg C says:

    As someone running a business abroad, I dread having to file my exceedingly complicated tax return to the US each year. The cost of this filing has gone up in fees to CPAs and Tax attorneys and relief from this unnecessary burden would be a blessing. Thank you for your work and let’s hope the US Government’s draconian approach to taxation of Americans living abroad will finally come in line with the rest of the civilized world.

  56. Responding to Greg C who writes:

    “As someone running a business abroad, I dread having to file my exceedingly complicated tax return to the US each year. The cost of this filing has gone up in fees to CPAs and Tax attorneys and relief from this unnecessary burden would be a blessing. …”

    Greg, you will be pleased to know that on March 4 Treasury indicated that there would be relief from the GILTI provisions for individuals who are the shareholders of CFCs. The final rule will soon appear in the Federal Register, but as I commented for a blog post, what it seems to mean is that individual shareholders will be treated as though they were corporate shareholders (including the 50% deduction).

  57. Avatar Spyro F says:

    This is a great article.
    What a shame that we are taxed even though we don’t live and work in the us.
    I live in Greece and am a minority shareholder in a company with other Americans. Since we together are majority owners we all have the Transition and GILTI mess draining us

    Hoping for a miracle…

  58. Avatar Anon a mouse says:

    So, a Canadian (his only citizenship) husband is inheriting a small amount of money from a European relative who passed away. This money is from a life insurance policy. Guess what? He needs to fill out a FATCA Form. That is what is scary. If a dual citizen received that form one day, they would either have to lie or identify themselves as a U.S. person. That is why hiding really isn’t an option for everyone. Who wants to lie to the IRS?

    Can the Canadian husband of a dual change the beneficiary of his own policy from his wife to his children? Would this be a crime in the eyes of the U.S. government if one decides to become compliant?

    Asking for a friend.

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